Fed: ACCI says FTA benefits likely to be small

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Fed: ACCI says FTA benefits likely to be small

CANBERRA, Aug 12 AAP - Australia's peak business organisation today gave a lukewarmendorsement of a free trade deal with the United States, warning its benefits were likelyto be small.

The Australian Chamber of Commerce and Industry (ACCI) said it feared the proposedfree trade agreement (FTA) could also divert trade and harm relations with other majortrading partners such as China and New Zealand.

Australia and the US have spent all year negotiating an FTA, with both countries hopefulof signing it off by year's end.

But Australian farmers have expressed concern about America's offers to liberalisefarm trade, while there is concern in the US agriculture sector about the FTA.

ACCI said although the agreement could be one of the most important bilateral dealsever signed by Australia, it did have its risks.

It said it was vital the FTA talks did not detract Australia's focus from the WorldTrade Organisation's (WTO) round of multilateral trade talks, which would offer Australiamuch larger gains.

The FTA had to deliver benefits in addition to any that came out of the WTO round, it said.

There was also a risk the deal could harm trade with other countries, diverting tradethat would have taken place if not for the FTA.

"Any economic benefits from such an agreement are likely to be small, and must be consideredagainst the trade diverting impact it is likely to have on our other major trading partners,and our broader relationships with them," it said.

"As a small trading nation, Australia must remain acutely aware of the implicationsof any bilateral or regional trade agreement for the primacy of the WTO system.

"Australia's vital national economic interests are best served by challenging any tradeor related trade initiative which has the potential to compromise the standing of theWTO and rule of international trade law."

AAP sw/sb/cjm/de

KEYWORD: TRADE US